Key property considerations in the construction and operation of renewable energy projects

Key Contacts: Eimear Fitzgibbon – Partner  |   Elaine Whelan – Senior Associate

Introduction

Property rights and property law considerations are the foundation upon which other key components of a renewable energy project, such as planning, grid, financing and construction are built upon. As we approach the first operational wind farms reaching the repowering stage, we consider below some of the key property considerations to be mindful of in the context of constructing and operating renewable energy projects.

1. Leases
Typically a developer will take a lease over the project site from the landowner. The benefit of a lease in contrast to purchasing the land outright is that it will be for a fixed period of time (i.e. years) and for an annual rent as opposed to forever, this often aligns with the lifespan for the project. In keeping options open for the future, an option to renew the lease contained within the original lease for a further term is advantageous to a developer.

2. Pinch points/haul routes
As part of the initial stages of a renewable energy project, a haul route survey is carried out on behalf of the developer. This route identifies portions of ground that may present difficulties when transporting the turbines or solar panels from the landing site to the development site. If the haul route survey identifies certain locations where the components traverse into another landowner’s property, the requisite property rights should be procured for this situation. It is worth considering obtaining the property right for the duration of the project because if the turbine needs to be replaced, the developer will have the right to transport the turbine in this situation.

3. Oversail agreements
Due to the wind turbines themselves often encroaching upon the airspace of the neighbouring property, procuring an easement from the relevant landowner prior to construction would be recommended in this scenario to minimise the likelihood of disputes arising at construction or operational stage of the project.

4. Declaration of identity
The declaration of identity for the project is arguably the most important property document for the project. A project site is made up of many components, planning permission, title, a grid route and access. The declaration of identity combines these various strands that are typically viewed in isolation and serves the purpose of confirming that the project can be constructed and operated as intended.

5. Project sub-stations
A developer will always have in mind the requirements of ESB or EirGrid pursuant to the projects grid connection agreement in respect of the substation site located on the project site. ESB and EirGrid seek freehold transfers of the land where the substations are built for energy supply prior to energisation of the project from the relevant landowner. In the context of offshore wind, EirGrid will own these offshore substations. Notwithstanding this, in addition to the usual property considerations for the construction and operation of a renewable energy project, developers will need to keep in mind the relevant property interests that will be required to bring the cables onshore and the requisite property interests in the landing stations.

6. Repowering
The first generation of wind farms are now reaching a critical juncture known as the repowering stage. Whilst the repowering process capitalises on existing infrastructure, it often necessitates upgrades to various elements such as foundations, grid connections, cabling, and even access roads, since the new turbines are notably larger and heavier than the outdated models they replace. From a property perspective, depending on the specific circumstances, this may require a developer to procure an additional option agreement for additional lands to be exercised in the future, an extension to the existing project site lease or if a different haul route is being used to transport the turbine components, procuring the relevant property rights in relation to this.

Conclusion
Developers and investors are increasingly recognising the opportunities presented by renewable energy initiatives. A title flaw affecting a potential renewable energy project has the ability to sabotage or at best, delay the construction and operation of a project. It’s important to ensure all the property interests are in place for such as the absence of one has the potential to delay development.